CS Executive · Corporate Accounting and Financial Management · Cash Flows
Ind AS 7 states that historical cash flow information is useful in examining which relationship, in addition to checking the accuracy of past assessments of future cash flows?
Historical cash flow information helps examine the relationship between profitability and net cash flow and the impact of changing prices, besides checking the accuracy of past assessments of future cash flows. Capital, dividend and asset-borrowing relationships are not the stated benefits.
- ABetween authorised capital and paid-up capital
- BBetween profitability and net cash flow, and the impact of changing pricesCorrect
- CBetween dividend declared and reserves created
- DBetween fixed assets and long-term borrowings only
Explanation
The text lists checking the accuracy of past assessments of future cash flows and examining the relationship between profitability and net cash flow and the impact of changing prices. The other relationships are not mentioned as benefits of cash flow information.
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